Manage Your Cash Flow

Learn to manage that cash flow

Cash Flow Management Tips

Everyone experiences ebbs and flows in cash flow every now and then, which is why a payroll loan can come in handy sometimes. However, you don't want to put yourself in a position where you depend on a payroll loan to make ends meet long-term. Here are some tips to help you better manage your funds.

Money Management Tips

Consider visiting a credit counselor. Credit counseling is a non-profit service available to those who are struggling with debt or other financial issues. A credit counselor can help you build your credit, establish a budget, or get out of debt. Credit counselors are a great source of financial advice, and they will give you customized recommendations on how to regain control of your finances. Credit counseling is available for low or no cost in most areas.

Establish an emergency fund of $500. A $500 emergency fund is a great way to buffer against those unexpected expenses that sneak up on you between paychecks. By planning ahead for such circumstances, you will not have to scramble to come up with the money when you need it. This may seem like a lot of money, but you can start small and work your way up. For instance, you might begin with a goal of saving just $10 per paycheck, and then progressively increase that amount. Eventually, you'll get to the point where you can access your emergency fund instead of a payroll loan.

Make a budget. A budget is the best way to plan your finances and curtail spending. When you see how much money you're spending on paper, it tends to make you think twice about frivolous expenses. Keep track of your spending, down to the last cent, for 1-2 months. Also track all sources of income for those two months. A good way to do this is to purchase a notebook, carry it with you, and write down all of your expenses. Keep receipts to make tracking easier. At the end of the two-month period, compare your expenses with your income. Is there a gap? If so, find ways to trim expenses and set limits on your expense categories to avoid needing a payroll loan so frequently.

Manage your finances without borrowing. A payroll loan is a great short-term solution to cash flow problems, but you don't want to get into the habit of borrowing every time you hit a gap in your cash flow.Try to come up with ways to manage your cash flow without borrowing. For instance, many creditors are willing to negotiate and give you some latitude if you let them know in advance you can't make a payment on time. You might also ask your employer for an advance on your next paycheck. Most employers are willing to do this for free.